Where are the most manufacturing jobs? A number of states have plenty. We all know Texas does.
But not as much as Michigan does, according to a recent study.
Since December 2009, no state has generated more manufacturing jobs than Michigan has, according to an in-depth analysis by the National Association of Manufacturing, which ranked the Wolverine State No. 1 in its Top 20 States for Manufacturing Job Creation list.
Since the beginning of the decade, Michigan has created more than 88,100 manufacturing jobs, far more than the 57,500 manufacturing jobs created in Texas. Indiana, Ohio, and Wisconsin rounded out the top five with 53,400, 51,800, and 38,300 jobs created, respectively.
According to the National Association of Manufacturers, Michigan surged to the top after seeing substantial gains in various sectors, such as defense, food processing, furniture, medical equipment, pharmaceuticals and, of course, automotive.
“The biggest change that came along was really just what was happening with the automobile industry,” Chuck Hadden, President and CEO of the Michigan Manufacturers Association, tells Leo Rommel of Industry Today. “They turned it around. When they came out the other end, they were much more focused. They were much more profitable. They had their costs under control. Because of that, they have been really taken off.”
Who would have imagined that? Not you or I, and certainly not Hadden.
“I don’t think anybody knew what was going to happen. No one was sure of anything back then,” he says. “But the storm clouds have certainly parted.”
His organization played a hand in that.
Started by automotive titans Ransom E. Olds and Walter Chrysler, the Michigan Manufacturers Association, based in Lansing, MI, is now over 110 years old, beginning first as a voluntary members association in 1902 before being incorporated in 1923.
The association represents the interests and needs of nearly 3,000 members, a minority of which are some of the world’s largest corporations. In contrast, about 90 percent are small manufacturing companies with fewer than 100 employees, according to Hadden.
“Roughly 65 percent of my members are still family-owned and operated,” he says. “Family-run businesses still dominate the state. You can see that up and down our manufacturing value stream.”
Altogether, MMA members employ more than 90 percent of Michigan’s industrial workforce, according to the organization’s website. The association was originally created, according to Hadden, to “work on workers’ compensation and other related issues, as a lobbying advocacy group for the state, in the state.”
“We’ve been actively being activists for our members ever since then,” he says. “We’re obviously very proud of our manufacturing heritage and really believe that it’s in our DNA.”
Members can also take advantage of some of the services the association offers, including a line of insurance products, a freight service that is discounted, and a dental program that, according to Hadden, is one of the best in the state. Of course, they have seminars, training programs, and industry conferences, too.
A HANDFUL HAND
But what separates the Michigan Manufacturers Association from similar organizations in neighboring states is how effective it is at pulling the right strings with the right state and federal legislators and regulators to ensure a fairer and more competitive tax climate for state business residents.
“We are constantly looking to halt the challenges out there that prevent our members from growing,” Hadden says. “Still, we’re working very hard right now on trying to cut unnecessary or unneeded regulations and trying to work with state educators, technical schools and community colleges to develop more knowledgeable talent for manufacturing.”
And, perhaps because of Hadden, or at least partly, MMA is quite the Johnny-on-the-spot problem solver, too.
Take, for instance, when the banks were frantically pulling their lines of credit at the height of the Great Recession. “Manufacturers were not sure if they could get through this whole recession,” Hadden says.
In response, Hadden and a number of his colleagues came up with a solution, one of many, actually: Meet with officials of the Michigan Bankers Association and discuss a way that members, with portfolios in hand, can be approved inside a half hour.
“I explained to them that I wanted to create a speed dating sort of arrangement where, after we train our members on how to put together a portfolio, they would take it to a loan officer and he or she would make a decision about whether they wanted to do business in about 20 minutes,” Hadden says.
The idea was a hit that was later used statewide.
“It really helped match the right business and manufacturers with the right credit people,” Hadden says. “I couldn’t have pulled off the matchmaking if these weren’t viable, good, reliable companies, which they were, and, in many cases, family owned and operated, too.”
Others greatly assisted in helping Michigan climb out of the recent recession ditch as well. Hadden will be the first to admit that it was, in reality, a statewide and even nationwide team effort.
“The credit goes around a little bit. The government and the governor have made things a lot easier in terms of corporate income taxes,” he says. “We have cut a number of regulations in the state, maybe over a thousand, that weren’t necessary. We are moving forward in that area with still having the safety of our public in mind. We are still looking for other ways we can improve like our personal property tax.”
Hadden also credits Michigan Gov. Rick Snyder.
“He has a relentless, positive attitude about turning Michigan around and tackling the problems we have and not kicking them down the road,” Hadden explains. “We’ve had a balanced budget for the last few years – a real balanced budget, not done by smoke and mirrors. He is focused on making a difference.”
Synder is up for reelection in 2014, but that is just one the issues Michigan needs to contend with as it continues its post-recession recovery, Hadden says.
A LEANER LIFE AFTER THE RECESSION
Michigan has enjoyed a fast economic turnaround. Many states, we are sure, are envious.
But there is a reason why Michigan has regained its footing so effectively: Contrary to popular belief, the state’s manufacturing industries exist way beyond just the auto industry.
Many, in reality, are remarkably diverse, expanding their businesses and factories into different sectors to ensure they do not depend too heavily on a single type of customer.
Hadden is quick to refer to a family-run boating manufacturer in Holland, MI, that, in just a few years, went from making only yachts to also producing wind turbine blades.
“That’s a turnaround into an entirely new product,” Hadden says, quite enthusiastically. “They are doing quite well. The father is still running the boating business while the son runs the blade business.”
Switching or extending into another manufacturing sector is not too hard to do in Michigan. After all, there are plenty of industries to pick from, Hadden says.
The state is among the leaders nationwide in the following industries, and each attracts clientele and eager spenders from others states and even faraway nations:
However, despite the abundance of industry – and, in some instances, the handsome salaries some of the jobs include – many remain skeptical about entering manufacturing as a livelihood, not just in the Great Lakes region, but coast-to-coast nationwide.
Paul Kuchuris, President of the Association for Manufacturing Excellence, told Industry Today earlier this summer that about 600,000 manufacturing gigs remain vacant because too many available candidates do not have the required science, technology, engineering, and mathematics skills and experience listed in the job description.
That is why MMA has worked at length with the state’s public school system, plus dozens and dozens of technical schools and community colleges, to promote life in manufacturing as a critical-thinking and analytical profession that is not only technologically oriented – and certainly no longer the grimy workplaces people often think of – but also provides a comfortable salary.
“Our emphasis is you do not necessarily have to go on to college to earn a great living and start a stellar career,” Hadden says. “This is a field that is booming again in Michigan, one that allows you to have continual learning the rest of your life.”
The tide is beginning to turn, he adds, albeit at a snail’s pace. He is certain it will keep on. “We’ve started pumping again,” he says. “We’re starting to refill that pipeline that dried up over the last decade.”
There have been other lingering consequences of the recession. Despite the newsworthy increases in job creation, manufacturers continue to have a lower payroll than they did pre-Great Recession – and they have since learned to do far more with far fewer employees.
So has MMA.
“We have not let anyone go, but we have not hired anyone, either,” Hadden explains, adding that most Michigan manufacturers have turned their attention to developing and implementing lean techniques.
“We are doing more with the current people that we have,” he adds. “We are working at it about as hard as we can with the number of people we have. We are just like many of our members.”
Other concerns, such healthcare and how the Affordable Healthcare Act, known as Obamacare, linger.
“Manufacturers do not know what it will mean for them in terms of costs,” Hadden says, adding that association officials have worked tirelessly to get as much information about upcoming healthcare initiatives into their members’ hands.
“They are very careful about adding employees,” he adds. “They will still do it. They have been. But they only do it because manufacturers are being pushed by customers to get more products out to them.”
Still, despite the uncertainties and shakiness in the years following the Great Recession, Michigan is doing quite well – so well, actually, that it is sometimes hard to remember the state was snake bitten by the economic downfall at all.
All you have to do is look at the latest recognition given to the state.
Industrial employment in Michigan posted a gain for the second consecutive year, according to the 2013 Michigan Manufacturers Directory, an industrial directory published annually by Manufacturers’ News Inc., based in Evanston, Ill.
Michigan gained 14,648 manufacturing jobs from January 2012 to January 2013, according to the directory.
Likewise, Site Selection magazine’s 2012 Governor’s Cup rankings listed Michigan fourth overall in major new corporate facilities and expansions last year.
Hadden says Michigan’s attitude toward manufacturing, essentially its bread-and-butter sector, has never waned, not even when the economic clouds went black a half-decade ago.
“We’re very competitive,” he says. “We’re working hard to solve our talent problem, as most of the nation is, and I think we are going to. Our taxes are very competitive in comparison to other states and provinces, and they will continue to get better.”
He adds, “The quality of life here – what you can buy a house for, how far your money will go – is even more of a reason for manufacturers to continue looking at Michigan. You can get here what you get in other states – and a whole lot more. We have proved that repeatedly, regardless of the times or economy, and we’ll continue to prove that in the years to come.”
About the Michigan Manufacturers Association
The Michigan Manufacturers Association (MMA) is the state’s leading advocate exclusively devoted to promoting and maintaining a business climate favorable to industry. MMA’s goal is to make it possible for Michigan manufacturers to compete in the national and international marketplace.